Ramsay Health Care Limited · ASX:RHC
Ramsay Health Care — H1 FY2007 Earnings Presentation
21 slides from Ramsay Health Care's earnings presentation, Feb 26, 2007
Slide 1: Financial Results Half Year ended 31 December 2006
pd WA HEALTH CARE Briefing — 26 February 2007 Financial Results Half Year ended 31 December 2006
Slide 2: Half Year Overview
HALF YEAR OVERVIEW Solid half year profit rise, built on strong year ago profit level boosted by Affinity acquisition Half year core EPS growth tracking towards full year guidance for 15% - 20% increase in core EPS Pleasing results from Ramsay and former Affinity hospitals Integration of Affinity an
Slide 3: Ramsay Financial Highlights
aS RAMSAY FINANCIAL HIGHLIGHTS HEAL CARE Continuing operations: a Revenue up 7% to $1.06 billion a Group EBIT up 10% to $108.2 million a Core Net Profit up 22% to $56.0 million a Group EBIT margin rises to 10.2% from 10.0% a Core EPS up 21% to 27.9 cents a 1 half dividend up 24% to 13.0 cents a Basi
Slide 4: Ramsay Financial Performance
RAMSA FINANCIAL PERFORMANCE HEAL CA Continuing Operations: Operating Revenue 1,055.6 983.5 7% EBITDA 138.2 127.5 8% EBIT 108.2 98.5 10% Core NPAT - continuing operations 56.0 45.7 22% Div: rations: Core NPAT ~ divested operations 0.1 4.2 Specific items and amortisation of intangibles (net of tax) (1
Slide 5: Financial Performance: EPS and Interim Dividend
as Financial Performance RAMSAY EPS and Interim Dividend Core NPAT from Continuing Operations $56.0 m $45.7 m 22% Less Preference Dividend $7.9 m $6.4 m NPAT used to Calculate Core EPS $48.1 m $39.3m 22% Shares on issue 172.4 m 171.3 m Core EPS — Continuing Operations 27.9 ¢ 23.0 ¢ 21% Interim divid
Slide 6: Half Year EBIT Growth
as HALF YEAR EBIT GROWTH PyANiSay Continuing Operations 120 100 Jun'04 Jun‘05 Jun'06 Dec'04 Dec'05 Dec'06 Group EBIT up 10% for half year, despite dilutionary effect of veterans’ hospitals and delay in recovery of Queensland nurses wage increases w Still on track to achieve synergy benefits of $50 m
Slide 7: Half Year Core Net Profit Growth
aS HALF YEAR CORE NET PROFIT GROWTH PYViS/y Continuing Operations Jun'04 Jun’05 Jun'06 Dec'04 Dec’05 Dec'06 m# Core NPAT up 22% for the half year w Affinity synergy benefits being reflected in NPAT
Slide 8: Half Year Core EPS Growth
2 HALF YEAR CORE EPS GROWTH RAMSAY Continuing Operations 30 26 : v : 22 22.0 : G if § 1s : ° e : 10 : Jun'04 Jun'05 Jun'O6 == = Dec'04 Dec'05 Dec'06 = Core EPS up 21% for the half year
Slide 9: Ramsay Dividend Growth
aS RAMSAY DIVIDEND GROWTH HEALTH CARE 16 i: Final Dividend : Interim Dividend 14 r 13.5 : v Pe : 13.0 ia 10 3 : 10.5 a 10.0 : : c 8 2 G 6 i 4 , Jun'04 Jun'05 Jun'06 : Dec’04 Dec’05 Dec'06 # Interim Dividend up 24% for the half year
Slide 10: Ramsay Cash Flow
as RAMSAY CASH FLOW HEALTH CARE $m Annual Half year oO FY 2004 FY 2005 FY 2006 POPC Ceeerer errr Ser rere ni eri & EBITDA (continuing and divested operations) O Gross Operating Cash Flow = Half year cash flow adversely effected by: >» One-off impact of replacement of ‘DVA receivables’ with private p
Slide 11: Effective Capital Management
aS ramsay EFFECTIVE CAPITAL MANAGEMENT HEALTH CARE | Atty $m | Acquisition — \ 1,500 V $1.4 bin Sn VA Divestment _ Va _ Brownfields: 1,200 WA Z|_siHosotals / oe 900 — = al A $756 m Te > 600 Divestment | 7 : — oo Divestment. © Hospitals 3 Sth Aust. Hospitals | 300 &Aged Care | —@ Net Debt (D) <™ Shar
Slide 12: Ramsay Operational Highlights
RAMSAY OPERATIONAL HIGHLIGHTS H CARE Group EBIT up 10% off vastly increased EBIT base following Affinity acquisition Hospital EBIT: » Affinity Australia hospitals EBIT up 7%, Indonesian hospitals EBIT down 2% > Ramsay hospitals EBIT growth reduced to 3%, due to dilutionary impact from Hollywood and
Slide 13: Ramsay Revenue Analysis
aS RAMSAY REVENUE ANALYSIS HEALTH CARE 2.55% @ 16.20% § 32.30% D 22.00% 2 26.95% NSW Qid OVic GO WA/SA_ Bi Indonesia » Veteran hospitals represent 17% of total revenue
Slide 14: EBITDA Growth & Margins
ae EBITDA GROWTH & MARGINS RAMSAY Continuing Operations HEALTH CARE Jun'04 Jun‘05 Jun'06 Dec'04 Dec'05 Dec'06 = EBITDA up 8% for the half year = Group EBITDA margin 13.1% vs 13.0% = Hospital EBITDA margin 15.0%, excluding prosthesis 17.1% 14
Slide 15: Occupancy - Patient Days
as OCCUPANCY — PATIENT DAYS PYAMISAY Continuing Operations Patient Days 000’s Admissions 000’s 1000 x 77 400 (I) oom 900 4 + 350 800 4 + 300 700 + + 250 600 4 + 200 500 4 IW (ia wo + 150 400 4 -——-:* 300 4 acre 7 100 200 T T T T T T 50 Dec'03 Jun-04 Dec'04 Jun'05 Dec'05 Jun'06 Dec'06 —¢=— Inpatients
Slide 16: Brownfields Expansion
BROWNFIELDS EXPANSION Major brownfields expansion plan accelerated and well progressed following realisation of Affinity benefits Developing large multi-service hospitals to attract increased referrals in major metropolitan areas Financial capacity to invest at least $400 million > Approximately $25
Slide 17: Ramsay Brownfields Expansion
aS RAMSAY BROWNFIELDS EXPANSION HEALTH CARE » Many brownfields projects are progressing well through the foundation and development phases » Construction of 4 operating theatres at Westmead commenced » St George Private: additional theatre opening March 2007. Land adjacent to the Hospital purchased
Slide 18: Ramsay Brownfields Expansion
aS RAMSAY BROWNFIELDS EXPANSION HEALTH CARE Cumulative Capex Spend (Indicative) FY 2007 FY 2008 FY 2009 FY2010 FY 2011 FY 2012 @ Brownfield Capex 0 'Catch-up' Capex Average construction profile 18 months Ramp up to ROI of 15% on brownfields over 2 to 3 years, post construction completion ‘One-off ca
Slide 19: Exploring Additional Growth Initiatives
EXPLORING ADDITIONAL GROWTH INITIATIVES Investigating acquisitions > Further Australian hospital acquisitions in areas where there are no competition issues > Opportunities to expand Ramsay hospital franchise offshore > Other areas of health care close to core management competency 19
Slide 20: FY 2007 Outlook
RAMSAY HEALTH CARE FY 2007 OUTLOOK On track to achieve growth in full year Core EPS in the range of 15% to 20% targeted at start of financial year 20
Slide 21: Health Care
pd WA HEALTH CARE: